AUD/USD tests the 200-hour moving average in move lower
Equities are softer on the day and the weaker sentiment there isn't helping the likes of the aussie and kiwi on the day. Both currencies were already weaker since Asian trading and are extending losses against the dollar as we move towards North American trading.
AUD/USD has now fallen to a low of 0.7104 on the day, testing support from the 200-hour MA (blue line). Break below that and the near-term bias turns more bearish though there is some minor support from the swing region around 0.7190.
The upside move yesterday stalled after testing the 50.0 retracement level but also the 100-day MA close to 0.7160. The aussie has weakened thereafter and the RBA minutes today basically confirms the slightly more dovish tilt by the central bank as governor Philip Lowe hinted towards at the start of this month.
I still reckon we'd be in for more choppy trading throughout the week as markets continue to eye US-China trade talks in Washington on Thursday. Hence, be wary of a potential turnaround in sentiment during North American trading later.
For now, go with near-term breaks but don't be greedy. It's tough to treat the current market as what you would normally. With traders and investors largely focused on trade talks, the state of flux is very much understandable until that is out of the way. Only then can we start building on trends and longer-term outlooks again.
